The Tribune

• Cruise port generates 31% of adjusted EBITDA

• And produces 41% of Global Port’s passengers

• ‘Material’ impact to grow as F&B tenants ready

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Nassau Cruise Port is being hailed as a flagship investment by its controlling shareholder with The Bahamas now accounting for almost one-third of its total group adjusted revenues and operating income.

Global Ports Holding, in its just-released annual results, touted its $322m-plus transformation of Nassau’s “iconic” port as “a testament globally” to its development abilities as it revealed the facility generated some 31.2 percent of its total adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) during the 12 months to end-March 2023.

The 49 percent equity owner also disclosed that the $34.2m in adjusted revenues generated from port operations during that period meant Nassau was responsible for 29.4 percent of the $117.2m total generated by a 27-strong worldwide portfolio of cruise ports.

And Nassau’s increasingly important contribution to Global Ports Holding’s financial performance was further highlighted by the fact that, over the 12 months to end-March 2023, it had received 3.8m - or 41.4 percent - of the total 9.2m passengers that passed through the group’s operated cruise ports.

Michael Maura, Nassau Cruise Port’s chief executive, told Tribune Business that this nation’s proximity to the world’s largest cruise passenger source market in the US - combined with the industry’s shift to shorter three and four-night cruises post-COVID - meant this nation had recovered more quickly than other cruise-reliant countries and ports in Global Ports Holding’s portfolio.

And, while its controlling shareholder’s ports in the Mediterranean were impacted by cruising’s regional seasonality, with ships diverted to others regions during the colder winter months, Nassau and the wider Bahamas benefit from the act that the industry is a consistent year-round business in this area when hurricanes strike.

Given that Global Ports Holding had just two operating ports, Nassau and Antigua, in the Americas region during its 2023 financial year, Nassau accounted for the vast majority of both the area’s $40.5m in adjusted revenue and $29m in adjusted EBITDA given that the southern Caribbean nation only contributed just over $6m to the former figure and received only 600,000 passengers.

Adjusted revenues and EBITDA were up 174 percent and 474 percent, respectively, compared to the prior year when the cruise industry was just starting its post-COVID recovery. With Nassau Cruise Port leading the way on both those percentage increases, Mr Maura told Tribune Business of The Bahamas’ importance to Global Ports Holding: “It’s material.

“Nassau’s operating revenue for that reporting period was $34.2m. We are a large contributor to the group’s overall financial performance. In terms of revenue, Nassau represents 29.4 percent of group revenue for this particular reporting period for port operations. Nassau also received 3,814,850 passengers, which represents 41.4 percent of the total group passenger volumes.”

Mr Maura also confirmed that Nassau Cruise Port’s EBITDA for the 12 months to end-March 2023 stood at $22.692m, which was equivalent to 31.2 percent - just under one-third - of Global Ports Holding’s total $72.7m in adjusted EBITDA. Nassau’s passenger count accounted for 86 percent of the Americas region’s total, and over 41 percent of the group’s 9.2m visitors.

“Nassau’s revenues were $34.2m from operations driven by 3.8m passengers landed during the period,” Mr Maura told this newspaper. “Nassau’s revenue and operating performance are expected to improve further driven by stronger passenger volume growth of 4.2m in 2023 and 4.6m in 2023. With respect to Nassau’s future performance compared to other ports in the portfolio, Nassau will remain a strong contributor to the group’s income.” 

Global Ports Holding’s annual report also disclosed that Nassau Cruise Port generated $19.23m in total comprehensive income for the year to end-March 2023. However, the 41-plus percent share of total cruise passengers did not translate into the same share of Global Ports Holding’s adjusted revenue and EBITDA (operating income).

Mr Maura noted that other ports in Global Ports Holding’s portfolio, namely Ege in Turkey, have a different rate structure which means they deliver a higher per passenger impact and contribution than Nassau. He added that “a very material objective of the company”, as well as the Government and all downtown Nassau tourism stakeholders, was to increase per capita cruise passenger spend.

The Nassau Cruise Port chief said this goal will be aided when all its restaurant, and food and beverage tenants, commence full operations now that the port’s own construction activities have been completed. He added that the attractions and activities offered by the port itself will also serve as a catalyst to attract more Bahamians, and stopover visitors staying at the likes of Atlantis and Baha Mar, to visit Bay Street and the surrounding area, and spend their money.

“There are very active discussions going on among downtown stakeholders, of which Nassau Cruise Port is one, and the Government. It is about improving the product of downtown given the legacy challenges we’ve had from passenger surveys and so forth,” Mr Maura said.

“While the company’s construction activities as part of this phase have been completed, we still have a few - less than a handful of tenants - almost exclusively on the food and beverage side in the process of completing their fit-out and getting operational. That’s going to have a material impact on passenger spend and the amount of time people spend in the area.

“The Island Port restaurant is expected to open in two weeks. Bamboo Shack is expected to open in about a month. Obviously that has a very strong brand from a Bahamian perspective. We have Chef Simeon Hall Junior and his partnership with the University of The Bahamas. Construction activity within that restaurant space is underway and that is likely not going to be completed until September,” Mr Maura added.

“They were delayed getting started, but that will be a big draw for our visitors and Bahamians coming down. We have two bar areas, modular in terms of construction, being constructed away and, when they come in, it will be a plug and play. We don’t expect them to come in until September. The food and beverage and bar element in the cruise port will have a material benefit to all aspects of the cruise port and, really, Woodes Rogers Wharf.

“The more there is to do in the downtown area, the more reason there is to come downtown and spend money. One of the principal objectives is to encourage Atlantis guests, Baha Mar guests and Bahamians to come downtown, enjoy the waterfront and spend time downtown.”

Mr Maura said reaction to the newly-unveiled Nassau Cruise Port had to-date been largely positive, especially from passengers. Pointing out that the city is “the largest transit port in the world for cruise passengers”, due to its US proximity, with many regular cruisers having visited multiple time, he said many visitors were “coming off the ship taking selfies and pictures of this new waterfront and downtown experience”.

Mehmet Kutman, Global Ports Holding’s chairman and chief executive, in his message to shareholders, wrote: “Nassau Cruise Port benefited from its proximity to the key home ports in Florida and the cruise lines’ near-term desire to operate a higher volume than normal of short cruises in this area at the expense of longer itineraries to other parts of the Caribbean. This decision helped Nassau Cruise Port report a 196 percent increase in cruise passengers to 3.8m.

“Nassau Cruise Port, on some days, is now hosting six cruise ships simultaneously, utilising the new berthing that was created as part of our significant investment into the port. On February 27, 2023, the port welcomed a record 28,554 passengers in a single day.

“Our investment in the transformation of Nassau Cruise Port continued..... Our vision for this iconic port is becoming a reality, and we believe this port will stand as a testament globally to our cruise port and destination development capabilities. Due to the major US cruise lines focusing on short cruises close to the southern US home ports throughout the winter 20222-23 cruise season, the recovery rate in passenger volumes at southern Caribbean cruise ports was less strong.

“For Global Ports Holding, this meant Antigua Cruise Port’s cruise operations recovered at a slower pace than that experienced by Nassau Cruise Port. Cruise passenger volumes at Antigua Cruise Port of 556,000 in the reporting period were up 135 percent from the 237,000 during the prior reporting period.”